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Permalink Reply by Florida Ginnie on August 14, 2008 at 1:19

Sorry Jim,
S 3, T 18 n, R 12w unleased 13 acres vacant land was presented with written legal offer with a contract lease went to set up and sign and was told by o&g that they made a mistake, my family does not own the land until 2 years if no drilling activity. Due to the 10 year, no production since 1954 according to DNR dry well at that time. My family signed contract in1998 the developer never closed the deal and recorded till 2001 and held mineral rights? Would it be right if the developer signed lease with O&G for 3 year 2-option when it has been determined there will be no activity (drilling) for approx. 2 to 3 years? Which in fact would then be 2-years and my family would own the mineral rights being met the entire 10 year requirement with no production. So at this point how could the developer go into a 3 year 2 option? Why can't my family go into a lease now for after 2 years it reverts to them anyway.
Thanks Jim P.S. Are you a landman?

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Permalink Reply by Margaret Wren on August 14, 2008 at 1:37

here is your question from a post yesterday:

Reply by Florida Ginnie 14 hours ago
Question? What if someone will have the rights for signing a mineral lease in 2-years provided there is no drilling then the rights reserve back to them (do to the 10 year). the previous owner only is left to do a lease for 2-years? Because if no drilling and the 10 years is up it reverts (mineral rights) to the current owner. So how would they at this point do a deal with an O & G co, if they only have 2 years to offer. Also how would the current owner do a deal if they have to wait to have ownership of minerals for 2 years?
Please assist. Plus the current owner received an offer in writing and when it came to signing the O&G backed out, said sorry we mailed you the contract offer but someone else owns it for 2-years. Any landmen want to touch this topic? Thank You

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Permalink Reply by Margaret Wren on August 14, 2008 at 1:43

the answer is still the same: i am not sure if you own the land or have the lease, good luck either way.

Reply by M. Wren A-1 14 hours ago
Delete I believe it goes like this:In Louisiana, if the previous owner still has two years before their 10 years is up and they lease the land to someone, if it is drilled and producing before the ten years are up they get to keep the mineral rights until there are no producing wells in the section, plus 10 more years, then if something is drilled and producing in those 10 years it starts all over again, a person could virtually draw royalties indefinately.If someone can confirm or deny this please do. I am drawing royalties on land I no longer own, and this was my understanding.

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Permalink Reply by Margaret Wren on August 14, 2008 at 1:52

If no drilling/producing well at the end of 10 years, then the rights go to the current landowner. Sorry I posted so much but I could only copy and paste one at a time lol!

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Permalink Reply by Florida Ginnie on August 14, 2008 at 2:05

Wren,

We own the property, but not the minerals until 2 years. The question is how can the previous owner go into 3 year contract with 2-year option when they only own 2 years left of mineral rights because it reverts to after the 2 years to the new owner. I am stating this with the 10 year no production La. requirements.
thanks

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Permalink Reply by PerryB2 on August 14, 2008 at 2:12

If they sign a lease in that two year period then the minerals (even though you own the property) does not revert to your family. The time period extends for as long as that lease/well is good. Once that time period of the lease is over you have to wait another ten years for the mineral rights. It is 10 years of inactivity. I hope this helps.

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Permalink Reply by Grice on August 14, 2008 at 2:58

Keep in mind that I am still in the learning stages, but I wanted to add what information I have learned so far (as it pertains to this topic).

If there is no production within 10 years of the original sale of the surface area, all mineral rights will transfer to the current owner of the surface area. However, during that 10 year period, the current mineral owner controls all mineral rights. If the current mineral owner leases the rights, and production begins within the 2 years remaining before the rights transfer to the surface area owner, then the current mineral owner will retain ownership for the duration of productivity (plus 10 years after productivity ends). If production does not take place within the 2 years remaining, the mineral rights will transfer to the surface owner, and the current mineral owner loses all rights to the minerals. Upon such transfer of mineral ownership, any contract between the current mineral owner and the O&G Company will be terminated.

The way I see it, the current mineral owner is gambling for production to begin within the remaining 2 years of his ability to control the minerals, while the O&G Company has locked the mineral rights for future production/global positioning.

Like I previously stated, I am still learning. If I am wrong, I hope someone will be able to clarify my errors.

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Permalink Reply by The_Baron on August 14, 2008 at 3:52

Keep in mind a dry hole will still interupt prescription. there does not need to be any production, as long as the well was a "good faith" operation as defined in section 29 of the state mineral code.

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Permalink Reply by Grice on August 14, 2008 at 4:21

Duly noted. Thank you.

Permalink Reply by P.G. on August 14, 2008 at 4:36

I would imagine If O&G signs a lease with current mineral owner, it's likely they'll be doing some drilling pretty soon. They know if they snooze, they lose!

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Permalink Reply by The_Baron on August 14, 2008 at 5:05

If you have leased or are about to lease, be careful. Many leases will have language that would make any addtional mineral interest be covered by the same lease. Make sure any language to this effect is acceptable to you before signing.

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Permalink Reply by Grice on August 14, 2008 at 5:23

If the surface owner has 1/2 interest in the mineral, could the remaining 1/2 interest be assigned without the secondary 1/2 mineral owner's permission? I would think the surface owner could only lease his share of the mineral, leaving the secondary owner unattached. If, by chance, the secondary mineral owners was forced into the lease, what legal recourse would he have to reclaim his fair share (either removed from the lease, or recover of lost income)? Would that lead to a civil matter, and if so, who would the secondary owner file against? The surface owner (for forcing the undue minerals into the lease), or the lease holder (for unauthorized use) ?

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